Google Might Have to Go to Market Alone With New Smartphone

Internet Giant Is Now a Retailer With Nexus One, but Don't Count on Ad Support From T-Mobile, Verizon

NEW YORK (AdAge.com) -- Google is now officially a hardware retailer, having unveiled its Nexus One smartphone today, but a potential game-changing feature has nothing to do with the phone itself: Google will sell Nexus One with at least three carrier partners -- T-Mobile, Verizon and Vodafone in the U.K. -- as well as make it available as an unlocked phone that can be used on any global mobile network, including AT&T's.

This is in contrast to Apple's iPhone, which can only be purchased with AT&T service in the U.S. (though AT&T's exclusivity over the phone runs out later this year), and more like Research in Motion's Blackberry, which is available on multiple networks.

But despite having at least three partners on hand to help it sell Nexus One, the internet giant might have to shoulder the marketing weight on its own.

Starting today, Google is selling the phone directly to consumers -- also a first for the search giant -- via its own website at google.com/phone. As was widely reported before the official launch, the phone will cost $179 when purchased with a two-year service contract with T-Mobile, or $529 without service for an unlocked phone.

Verizon and Vodafone will start selling the phone in the spring and haven't yet announced pricing. Unlocked phones will work on any network, including AT&T's, that runs on GSM technology, the general global standard for mobile phones. But because Nexus One operates on a different radio frequency, it won't be able to access AT&T's 3G network.

Asked if Nexus One should be viewed as an "iPhone killer," Google VP of Engineering Andy Rubin, inventor of Android who once worked at Apple, replied: "I think choice for consumers is a really good thing."

Marketing support
Verizon is already putting significant marketing might behind another phone powered by Google's Android mobile-operating system, the Motorola Droid. How much of a marketing push Verizon and T-Mobile would put up to support the phone remains unclear, though comments by T-Mobile suggests very little, if any at all.

"We focus the lion's share of our device-related marketing dollars on T-Mobile-branded devices and T-Mobile-inspired experiences," said a T-Mobile spokesman, noting that the Nexus One, rather than being a T-Mobile dedicated device, is a sold by Google.

A Verizon spokeswoman referred all queries about the phone to Google. For its part, the search company said it would lean on web marketing and advertising to get the word out. But some analysts believe that Google ought to explore other promotional approaches.

"Google needs to think about other models of marketing," said Gartner analyst Ken Dulaney. "They need to get on TV and talk about their Android application store. With any smartphone, the anchor point is the application."

By the same token, many analysts say they're not looking for blockbuster sales for the phone.

"It's probably an experiment for them," said Soumen Ganguly, principal at consultancy AV & Co. "If they see meaningful numbers, then it could be a good channel for other handset makers to use in parallel with the carrier channel."

By selling an unlocked version of the phone directly to consumers, Google is loosening the traditional lock that the mobile carriers have had on handsets -- and treading old ground where the likes of Nokia have failed. It's also a direct shot at Apple's iPhone, which has a significant head start in users, more than 100,000 applications in its App Store, but is tied to AT&T, widely considered inferior to Verizon in network coverage.

Both Apple and Google bought mobile ad networks (Quattro and AdMob, respectively) to own a piece of mobile advertising, the lifeblood of mobile services and applications.

Looking for buzz
In unveiling the phone, Google certainly took a different approach from Apple, which keeps a Kremlin-like lock on products in development.

Google distributed handsets two weeks ahead of the launch to a variety of journalists, bloggers, reviewers and tech influencers such as Michael Arrington at TechCrunch; Fred Wilson, partner at VC firm Union Square Ventures; Walt Mossberg at the Wall Street Journal; and Joshua Topolsky at AOL tech blog Engadget.

The strategy resulted in a deluge of "leaks" over the past few weeks and while most of today's news was out before Google introduced the phone, the company benefited from a raft of reviews timed for the launch date.

Most of the reviews point out that while Nexus One doesn't allow the "pinching" gesture iPhone users love, and that the phone ships with less memory than the iPhone, it has some advantages, including the ability to run multiple applications simultaneously and a noise-canceling feature to make calls clearer.

That last bit came with a not-so-subtle dig at the iPhone, hobbled by dropped calls on AT&T's network. "Voice is such an integral feature of the phone experience," said Erick Tseng, Google's senior project manager.

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Michael Learmonth

Michael covers the intersection of technology, media and marketing, including Google, Facebook, Twitter and AOL. He edits the Digital section of AdAge.com and oversees editions of Ad Age's Digital Conference in New York and San Francisco. He joined Advertising Age in 2008 after working at Silicon Alley Insider, Variety, Reuters and The Industry Standard.